Frank your comments are right on the mark. I thought that you and other's would like
the following articles.
This post is mainly directed to those who are long term holders of INTC or considering
INTC as a long term core holding. I have extracted a few of the salient points of interest
to long term holders and specifically INTEL investors from some articles at WORTH Magazine's site.
The complete URL's are posted at the end.
This first extract is from:
Use Your Edge
By Peter Lynch
Amateurs can beat the Streat because, well, they're amateurs.
At the risk of repeating myself, I'm convinced that this type of failure is unnecessary --
that amateurs can not only succeed on their own but beat the Street by
(a) taking advantage of the fact that they are amateurs and
(b) taking advantage of their personal edge. Almost everyone has an edge.
It's just a matter of identifying it.
I avoided buying technology stocks if I didn't understand the technology,
but I've begun to rethink that rule. You didn't need a Ph.D. in programming
to recognize the way computers were becoming a bigger and bigger part of our lives,
or to figure out that Microsoft owned the rights to MS-DOS, the operating system used
in a vast majority of the world's PCs.
Computer buyers who can't tell a microchip from a potato chip still could have spotted
the intel inside label on every machine being carried out of the computer stores. Not
surprisingly, Intel has been a 25-bagger to date: The company makes the dominant
product in the industry.
Early on, it was obvious Intel had a huge lead on its competitors.
The Pentium scare of 1994 gave you a chance to pick up a bargain.
If you bought at the low in 1994, you've more than quintupled your investment,
and if you bought at the high, you've more than quadrupled it.
There are ways you can keep yourself from gaining on the good growth companies.
There are two ways investors can fake themselves out of the big returns that come
from great growth companies. The first is waiting to buy the stock when it looks cheap.
Throughout its 27-year rise from a split-adjusted 1.6 cents to $23, Wal-Mart never looked
cheap compared with the overall market. Its price-to-earnings ratio rarely dropped below 20,
but Wal-Mart's earnings were growing at 25 to 30 percent a year. A key point to remember is
that a p/e of 20 is not too much to pay for a company that's growing at 25 percent.
Any business that can manage to keep up a 20 to 25 percent growth rate for 20 years
will reward shareholders with a massive return even if the stock market overall is
lower after 20 years.
The second mistake is underestimating how long a great growth company can keep up the pace. In the 1970s I got interested in McDonald's. A chorus of colleagues said golden arches were everywhere and McDonald's had seen its best days. I checked for myself and found that even in California, where McDonald's originated, there were fewer McDonald's outlets than there were branches of the Bank of America. McDonald's has been a 50-bagger since.
These "nowhere to grow" stories come up quite often and should be viewed skeptically. Don't believe them until you check for yourself. Look carefully at where the company does business and at how much growing room is left.
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I am not familiar with the following individual but I did agree with his analysis
and there has been talk on this board about RAMBUS.
Exploit Clear Trends
By Jim Jubak
With $1 million to invest, I'd place large bets on a few trends that are likely to shape the economy over the next decade. The strategy isn't as risky as it sounds because I'd build this portfolio by mixing the stocks of big established companies (ones I know will be around in ten years) with those of smaller up-and-comers that could
burn up the track (or crash).
As for the computer industry, Intel is guiding the way.
Intel has made it easy to figure out the trends in the computer industry:
Over the next few years the industry is headed exactly where Intel decides to drive it.
The trends, according to Intel, are richer and richer media -- better color photos, full-motion video, 3-D video -- delivered through your home computer. Intel will get a big piece of that future -- but, hey, Intel's a big company. While it should be a core holding in any portfolio attempting to cash in on the future, this stock isn't the best way to leverage those trends.
The extremely adventurous can keep their eyes open for an IPO from RambuS, a company that is developing a next-generation technology for memory chips (the chips that store the instructions that processors use). Intel, worried that its faster and faster processors will soon hit a bottleneck caused by slow memory chips, has endorsed the Rambus technology.
The URL for the full text of Mr. Lynch's article may be found at,
Use Your Edge
By Peter Lynch
worth.com
The URL for the full text of Mr. Jubak's article may be found at,
Exploit Clear Trends
By Jim Jubak
worth.com
The link for all the articles in the story is: worth.com
May you prosper in your investing,
Brian Malloy |
